Sunday, January 22, 2012

Senator Jeb Bradley has now proposed three amendments to HB 648 that favor big utility companies over New Hampshire families. These amendments weaken property rights.

Senators Bragdon and Forrester have proposed an amendment that defends property rights and protects property owners by closing loopholes in RSA 371:1 and conforming it to Article 12-a.

Many senators are still deciding how they will vote on HB 648. Even if you have already contacted senators, please reaffirm your support for Bragdon/Forrester. A short email with “Vote for Bragdon/Forrester” in the subject field will accomplish this.

On Tuesday, January 24th, which is the day before the Senate votes on HB 648, please contact* legislators with the following simple message:

State Senator Jeb Bradley has prepared some new proposed amendments to HB 648, the important bill that would stop unconstitutional eminent domain abuses by private transmission lines. Bradley has proposed no fewer than three amendments now to confuse the issue, derail HB 648, and stymie the Bragdon-Forrester amendment that would improve the legislation.

Amazing as it may seem, Bradley’s amendments actually encourageunconstitutional "takings" of private property from New Hampshire families. The Legislature simply cannot write statutes that violate (in this case create an off ramp from) Article 12-a of the Constitution.

Bradley’s changes disregard our state constitution and the will of the people by enabling unconstitutional "takings." In sharp contrast, HB 648 Bragdon-Forrester respects our state constitution and brings the eminent domain statutes into line with the strict limits against eminent domain by private development projects in Article 12-a of the constitution.

Bradley’s amendments stoop to new lows of legislative trickery.If Bradley’s amendments are adopted, the result will be to advance the business interests of the big utility companies at the expense of New Hampshire property rights.

TIME IS SHORT.WE URGE YOU TO CONTACT YOUR SENATOR.PLEASE URGE YOUR SENATOR NOT TO FALL FOR JEB BRADLEY’S TRICKS.ASK YOUR SENATOR TO STAND UP FOR NEW HAMPSHIRE FAMILIES AND OUR CLEAR CONSTITUTIONAL PROPERTY RIGHTS.

We apologize for the length of the analysis that follows, but it is crucial to understand how the Bradley amendments disregard Article 12-a of the Constitution and undercut property rights.

Background

In 2006 New Hampshire voters overwhelmingly adopted strict new constitutional limits on “takings” of private property.By an 85% vote, the people of New Hampshire codified in Article 12-a of the state constitution that eminent domain may not be used “if the taking is for the purpose of private development.”

These strict New Hampshire limits were imposed in response to the infamous Kelo v. New London case.In Kelo, the US Supreme Court approved the use of eminent domain to take Suzette Kelo’s family home for a private real estate redevelopment project.The court said the city’s claim of higher tax revenues and other economic and social benefits was enough to justify the taking.Article 12-a was New Hampshire’s response; and it was intended to make it 100% clear that private projects do not get eminent domain, regardless of how many economic and social benefits they may generate.

Fast forward to last year.Hydro-Quebec, NortheastUtilities, NStar and Public Service of New Hampshire (PSNH) announced NorthernPass, a private, for-profit transmission line project that would bisect New Hampshire. This transmission line was not asked for or found to be needed by any federal, regional or state regulator.Instead, the project sponsors dreamed up NorthernPass solely for their own corporate profit.They carefully designed the project so that they would pay all project costs (NorthernPass is a “participant-funded” project) and thereby keep the exclusive use of the transmission lines for their own benefit.

Even though NorthernPass is the poster child for a private project prohibited from eminent domain by the state constitution, the project sponsors have threatened to “take” land needed to build the transmission lines.In regulatory filings and statements to the press, NorthernPass consistently maintains that it can seek eminent domain to seize the land it needs from New Hampshire families who don’t want to sell.

NorthernPass is just the tip of the iceberg.An explosion of private transmission lines – with the accompanying threat of eminent domain abuses – looms over New Hampshire.See this map of lines that are already in the planning process.

HB 648 was introduced to protect New Hampshire property rights from these eminent domain abuses.The bill provides that private transmission lines (just like generation plants in today’s de-regulated environment) may not use eminent domain.Project sponsors can freely assemble land in voluntary transactions with willing landowners, but cannot condemn land by exploiting loopholes in the old eminent domain statutes that have not been updated to reflect the strict limits of Article 12-a.

HB 648 was overwhelmingly approved by the New Hampshire house and is now pending in the New Hampshire senate.

Bradley’s Legislative Trickery

HB 648 is simple, clear, necessary and effective.With the wording improvements in the proposed Bragdon-Forrester amendment, the bill provides that private transmission lines (that is, participant-funded electric transmission projects) may not seek to use eminent domain in our state.Bragdon-Forrester respects our state constitution and brings the eminent domain statutes into line with the strict limits in Article 12-a of the constitution against eminent domain by private development projects.

In his effort to obfuscate the clarity provided by the Bragdon-Forrester amendment, Senator Bradley has now proposed no fewer than three amendments that seek to turn HB 648 inside out.Bradley is contorting HB 648 into legislation that will no longer prevent eminent domain abuses, but will instead provide a roadmap for private transmission lines to “take” land from New Hampshire families.

The Bragdon-Forrester amendment changes the last sentence of the applicable eminent domain statute (RSA 371:1) to prohibit eminent domain for private transmission lines.Although not yet final, the wording is something like this, with the new language in bold italics:“No public utility may petition for permission to take private land or property rights for the construction or operation of an electric generating plant or a participant-funded electric transmission project.”This is a clear prohibition on eminent domain for these projects.

In contrast, Bradley proposes language that would enable eminent domain for private transmission projects.Bradley’s most recent language (a revision to the Bradley-Carson amendment) would add a sentence to RSA 371:1 that authorizes private transmission line “takings.”Eminent domain by private transmission lines would be allowed if the state Public Utilities Commission (PUC) finds that the transmission project “is necessary for system reliability in this state, or provides a means of lowering electricity costs in this state, or provides environmental benefits in this state.”

Why do we call this legislative trickery?Because at first glance, the words look like they have some meat to them.Bradley says “takings” for private transmission lines will be allowed only if the PUC makes some specific findings.He even uses the words “system reliability” from the original version of HB 648 passed by the house.

But it’s all smoke and mirrors.The three tests Bradley sets up for the PUC are “or” tests (disjunctive).Only one test has to be met and the limits disappear.If any test is met, then the private transmission line can use eminent domain.

To keep it simple, all you need to look at is the second test (“provides a means of lowering electricity costs in this state”).By definition, this will be met by any transmission line bringing new electricity supply to the New England grid.It’s nothing more than the immutable law of supply and demand.If you add supply to the grid, of course there is a “means” for prices to come down.Add supply and, all else held equal, prices fall, even it’s just by a fraction of a fraction of a penny.

We repeat that to be sure the point is clear: every single private transmission line will automatically meet Bradley’s amendment language and qualify for eminent domain, because new electricity supply to the grid can by definition reduce prices.Bradley’s amendment is not a hurdle or a test.Bradley’s amendment is a fraud -- carte blanche for private transmission lines to use eminent domain.

What about the other two tests, reliability and environmental benefits?Remember, you don’t need to consider either of these to discredit Bradley’s amendment because his three tests are “or’s” and only one must be met to qualify for eminent domain.But even if Bradley were to change the “or’s” to “and’s,”that is, even if all three tests must be met, it’s still smoke and mirrors.The Federal Energy Regulatory Commission (FERC) has already commented that NorthernPass may add to “reliability” because there is a new, redundant source of electricity.And the PUC could adopt Hydro-Quebec’s claims that hydropower is less environmentally damaging than coal fired power plants.These are easily manipulated subjective hurdles thatwill mean little in the hands of a highly activist and highly political (and arguably captive) administrative agency such as the PUC.

So even if Bradley bobs and weaves on the senate floor and changes “or’s” to “and’s,” the message is clear.Bradley’s language enables eminent domain abuse by private transmission lines.Bradley’s language is a fraud on the people and an insult to the senators who are working in good faith to address the property rights issues.

Article 12-a prohibits eminent domain by private development projects.In a trick worthy of a circus magicianexpert at drawing attention away from what is really happening, Bradley has proposed another amendment (Bradley-Deblois) that parrots Article 12-a.Bradley would create the appearance that his amendment updates the eminent domain statutes to incorporate the strict Article 12-a limits, but it’s a diversion.In fact, Bradley would enable eminent domain by private transmission lines.

Bradley’s language, which would form a new, stand-alone paragraph in RSA 371:1, quotes Article 12-a in its entirety.Bradley’s amendment then states:“Therefore, no private development entity may petition the public utilities commission for the use of eminent domain.”

At first glance, this looks good.The language reads as a flat prohibition on any private development entity petitioning for eminent domain.But don’t be fooled so easily.

The trick (like the circus magician) is that this language is placed off by itself.It’s just a diversion to make it seem that Bradley is protecting property owners (not true) and to draw attention away from the fact that Bradley has made no change whatsoever to the main part of RSA 371:1, which authorizes private transmission lines to apply for eminent domain!

Let’s go over this slowly to be sure it’s clear.

1. Private transmission line developers are statutory “public utilities.”
Under New Hampshire’s ancient statutes, pretty much any company having anything to do with electricity falls into the overbroad definition of “public utility.” These statutes define “public utility” as “every…company…and person…owning, operating or managing…any…equipment…for the generation, transmission or sale of electricity ultimately sold to the public” (RSA 362:2, emphases added). If you merely “own” any transmission equipment, as will Northern Pass and every other private transmission line developer, you’re automatically a “public utility.”

3. Private transmission lines (including Northern Pass) can therefore apply for eminent domain under the current language of RSA 371:1.Bradley’s language makes no changes whatsoever to the existing eminent domain authority available to “public utilities” under RSA 371:1.This provision has the loopholes that Northern Pass and other private transmission lines can try to exploit.And because these entities will be “public utilities,” this is how they’ll proceed.

4. Bradley’s new, nice-sounding constitutional language is therefore irrelevant to eminent domain by Northern Pass and other private transmission lines because they will qualify under the extremely broad definition of “public utility.”The new language quoting Article 12-a is a stand-alone provision that says “private development entities” can’t petition for eminent domain.It doesn’t make any change to the current version of RSA 371:1, which authorizes any “public utility” to petition for eminent domain.Private transmission line developers are technically “public utilities,” so they’ll proceed under the current version of RSA 371:1.

When we used the term “legislative trickery” to describe Bradley’s amendments, we did so carefully.You can’t make up a more cynical set of tricks than what you see in the Bradley-Deblois amendment.

Trick #3:Bradley proposes new eminent domain procedures that hurt landowners and help private transmission line developers

The Bradley-Carson amendment has a few pages of nice-sounding procedural stuff that, at first glance, would appear intended to help property owners.But it’s not true.The provisions are actually a roadmap for private transmission line developers to become more efficient and effective at abusing landowners in the eminent domain process.We’ve previously written about this at length.

A few quick highlights…

The Bradley-Carson amendment provides a $25,000 fine for unlawful threats of eminent domain.That’s meaningless chump-change when private transmission line developers like Northern Pass are out bidding and paying millions of dollars to buy up land under the wrongful threat of eminent domain.For $25,000 (just 2.5% of a $1MM land purchase, a fraction of the real estate commission), Bradley-Carson gives Northern Pass and others a free pass to threaten and intimidate landowners.Heck, for a really important piece of land they may want to spend $50,000 on fines so they can make two rounds of threats.Some protection…

The Bradley-Carson amendment says that Northern Pass or another private transmission line developer can’t petition for eminent domain unless they’ve offered the landowner a price of two times appraised value.Unfortunately for landowners, 2x appraised value is actually a sharp discount to the market price Northern Pass has recently paid for transmission corridor land.Northern Pass has offered or paid multiples of this – well more than 5-10x.Bradley-Carson would take money out of landowners’ pockets by stripping away the market premium for transmission corridor land and capping prices at 2x appraised value.By lowering the price by statute, this takes money from landowners and puts it into the pockets of the private transmission line developers.What else would you expect from Jeb Bradley?

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Bradley’s amendments are a fraud on New Hampshire voters and an insult to his senate colleagues.In a just world, they will be summarily rejected, and Bradley will be held politically accountable.

New Hampshire voters and Bradley’s senate colleagues should ask themselves why Bradley would propose such harmful amendments. Readers can decide for themselves if part of the answer lies in the following list of contributors.